Industrial metals, LPG and steel prices are set to end in 2017 as China, the world's second largest economy, is driving demand for clean fossil fuels and raw materials for clean environmental technology.
For 2018, analysts see the same development: accelerated economic growth in the major economies and rising infrastructure spending will drive up industrial commodity and energy prices beyond the multi-year high that has now been achieved.
Analysts believe that the end of low commodity prices has been reached because strong economic growth is expected in 2108 as well. The high demand for metals needed for the booming energy sector, such as copper for power lines and solar system cables, should lead to further price increases. This includes aluminum for the production of electric cars.
The prices for copper and aluminum rose just before the end of the year by almost a third to a four-year high. Experts from the world's largest copper smelter expect further price increases of 25% over the next two years as demand exceeds supply.
Liquefied petroleum gas (LNG) developed from loser to winner in 2017. Since June, prices have doubled in Asia. Last year, LNG was still the raw material that had the worst performance. The reason for the current rise in prices is that China is supplying millions of households with gas, because coal combustion causes too many particulate matter emissions. The implementation of this program will take years to come, but pollution in China is already noticeably decreasing.
China is investing huge sums in renewable energy programs. The solar power industry is also expanding globally: the plants currently have a capacity of 300 gigawatts, compared to just 1 gigawatt in 2000. By 2020, capacity is expected to double again to 600 gigawatts. The growth was mainly caused by China: 100 gigawatts are currently being produced there and 50 gigawatts are added annually.
Even coal has been able to benefit from the commodity boom, even though it suffers most of the environmental sins. Australia's coal prices rose 10% in 2017 as China shut down some of its coal mines, forcing energy companies to import.
The world's most important energy source, crude oil, broke the $ 67 / barrel mark in the last few days, up 17% this year and even 50% since mid-2017. OPEC had successfully campaigned for a reduction in production.
Contrary to what has been the case so far, most agricultural commodity prices are down as global inventories have risen to record levels. Raw sugar has lost about 25% of its value this year because there is a surplus of 5 million tonnes. In 2016 there was still a deficit of 3.1 million tonnes.
Even coffee prices are 20% lower than at the beginning of the year, because the weather in Vietnam increased the production volume unexpectedly strong.
Corn production reached a new record this year. In the last ten years, record crops have been harvested eight times. Soybean production also reached a new all-time high in 2017. Over the last five years, new records have been set in four years. This resulted in a price decrease of 5% over the year.
By contrast, wheat prices rose by more than 5% year-on-year, after falling five consecutive years.However, quality wheat is also scarce in the surplus regions USA and Australia. Scientists attribute this to the weather phenomenon La Nina.
Production of palm oil in Malaysia fell by 10% in 2017, yet supply exceeds demand from importers in China and Europe.
Text: HANSA Derivatives Trading GmbH / 
